Anti-Dollar Sentiment Means $1.40 Euro, Ruskin Says: Tom Keene

Sept. 29 (Bloomberg) -- Weakness in the dollar will help
push the euro as high as $1.40, according to Alan Ruskin, an
analyst at Deutsche Bank AG.

“It’s really a case of massive dollar shorts put on
against everything inclusive of the euro, and the euro something
of a safety valve when some of the other currencies are not
allowed to revalue versus the dollar,” Ruskin, global head of
Group of 10 foreign-exchange strategy at Deutsche Bank in New
York, said in a radio interview today with Tom Keene on
“Bloomberg Surveillance.” A short is a bet a currency will
depreciate.

The euro, which according to Ruskin has rallied “a little
further than I would have anticipated,” may rise as high as
$1.40, a level last reached in February.

“Then I think we’ll see some sort of sticker-shock element
creep into the marketplace,” he said. “I think $1.39, $1.40 is
plausible. Beyond there, it’s going to be tougher going.”

The U.S. currency declined 0.4 percent to $1.3635 per euro
at 12:06 p.m. in New York, from $1.3585 yesterday. It touched
$1.3643, the weakest level since April 15.

The dollar is at the center of an embattled currency
market, according to Ruskin. “That’s the primary focus: dollar
funding, dollar weakness and who might benefit on the other
side,” he said.

Ruskin said one of his favorite trades is to buy the
Swedish currency against the pound.

With the weak U.S. dollar, few countries are willing to
risk export growth by allowing their currencies to appreciate,
according to Ruskin.

“It’s more a case of countries trying to stop revaluing
their own currencies in the face of dollar weakness,” Ruskin
said. “I put the burden of responsibility at least as much on
the dollar side in terms of dollar weakness effectively
generating de facto strength on the other side.”